Founder's Pocket Guide: Startup Equity
by Stephen R. Poland · 2015
In a nutshell
By Stephen R. Poland (2015, 1x1 Media), this short reference guide explains how startup equity works in practice: cap tables, vesting, dilution, and option pools, aimed at first-time founders making early equity decisions.
Overview
Stephen R. Poland, a startup finance educator, published Founder's Pocket Guide: Startup Equity in 2015 through 1x1 Media as a short, practical primer for early-stage founders on equity mechanics.
Key Ideas
- A capitalization (cap) table tracks who owns what percentage of the company, and changes with every financing event.
- Vesting schedules protect co-founders and the company if someone leaves early.
- Option pools set aside equity for future employees and dilute existing shareholders when created.
- Each funding round dilutes founders' percentage ownership, even as the company's value may grow.
- Understanding these mechanics before raising money avoids unpleasant surprises later.
Best For
First-time founders setting up their cap table and equity structure before their first raise.
Reference
Founder's Pocket Guide: Startup Equity — publisher / official page. Summary adapted from the Awesome Startup Books collection.
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